pops up picture collage vid with transitions

You can create your PiP clips as secondary storylines. You can add Transitions to those (a secondary storyline will automatically be created as soon as you add a transition to two adjacent connected clips anyway) Once created, select all the clips in the secondary storyline and Scale them down and position them where you want them. You won't have access to the precision editor for the transitions, but you can adjust the handles by dragging the vertical hashmark icons along the left and right top edge of the transition, then resize the transition in the normal way (if you need to increase the lengths.)

The green side adjusts the handle of the beginning of the "outgoing clip" and the red side adjusts the handle of the end of the "incoming clip."

I also made this "title" effect for PiP:

http://www.youtube.com/watch?v=w0kyqSJTa98

It's free...

It allows you to switch whatever is playing in the storyline as the PiP, for whatever you load into the drop zone.